De Beers CEO “cautious” about U.S. demand in 2nd half

Rob Bates

While De Beers—and the jewelry industry as a whole—have enjoyed a strong first half of 2022, the company feels a lot more cautious about the second half, CEO Bruce Cleaver told JCK in an interview Friday [July 29], a day after the release of De Beers’ first-half financial results.

I’m surprised and impressed at how robust American demand has been,” Cleaver says. “But there’s no question things are getting a bit slower. I am sure there will be many twists in the next six months. My message is to my organization is we are going to have to be really focused on costs and productivity.”

He notes that, with travel returning, “there will be more competition in the second half than we had in the first.”

Still, given the industry’s coming off a historic 18-month run, he urges the trade to remember “there’s a lot to be positive about.”

Now is the time to invest more in marketing,” he says. “We have to keep doing more to capture new consumers.

De Beers has raised prices on rough recently, leading some sightholders to complain about tightening margins.

Voir l’articleWe try very hard to price rough to meet the resultant polished,” he says. “There’s no doubt that polished prices have risen in the first half. We will continue to be responsible. We want to ensure that sightholders make a decent return.”

He believes that sanctions on Russian diamonds have led to “an illusion of scarcity,” particularly in the United States.

Russia’s invasion of Ukraine has also boosted De Beers’ origin program, Tracr, he says.

In 2022, we put Tracr on steroids. Provenance is never going away as an issue, and it always was an issue.”

Having Tracr-verified provenance is now an option for sightholders, and more than half of them currently use it, he says.

JCK has heard two objections to the program. First, De Beers clients—as well as people who buy from those clients—don’t necessarily want their downstream customers to know which companies they source goods from, because those customers can just go around them and buy direct from those companies.

We have privacy settings that let you hide that data,” Cleaver says. “You will be able to see that the diamond changed hands,” but users can decide whether the names of the companies that sold it will be visible.

Others have worried that non-Tracr goods could end up devalued.

There are some things that we do need to think about, but I don’t think that’s a reason not to do this. That’s what people said before the Kimberley Process launched. That’s an issue whenever you have greater transparency. But this is the direction the world is moving.”

Currently, the program is available for rough stones of 1 carat and above. Tracing smaller stones is “another challenge,” he says.

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Source JCK Online